Housing shortages abound in markets across the country and that could set home shoppers up for a challenging spring. The nation’s housing supply saw the steepest year-over-year decrease in January in more than four years, dropping 13.6% annually, realtor.com® reports. The supply for homes for sale is now at its lowest level since realtor.com® began tracking such data in 2012.
The housing shortage shows no signs of easing in the coming months either, realtor.com® says. The volume of newly listed properties is down by 10.6% since last year.
“Homebuyers took advantage of low mortgage rates and stable listing prices to drive sales higher at the end of 2019, further depleting the already limited inventory of homes for sale,” says Danielle Hale, realtor.com®’s chief economist. “With fewer homes coming up for sale, we’ve hit another new low of for sale-listings in January. This is a challenging sign for the large numbers of Millennial and Gen Z buyers coming into the housing market this homebuying season as it implies the potential for rising prices and fast-selling homes—a competitive market. In fact, markets such as San Jose in Northern California, which saw inventory down nearly 40 percent last month, are also seeing prices grow by 10 percent while homes are selling at a blistering pace of 51 days.”
The housing shortage is present across price points too. It is most evident in the entry-level market, realtor.com® says. In January, homes priced below $200,000 saw a 19% drop in inventory. Among the mid-tier of properties—those priced between $200,000 to $750,000—inventories fell 12% year-over-year. In the upper-tier of properties—priced at more than $750,000—inventories dropped by 5.9% annually.
As inventories fall, home prices are rising. The median U.S. listing price increased by 3.4 percent year-over-year, reaching $299,995 in January, according to realtor.com®.